Hisle v. Todd Pacific Shipyards Corp.

• Decision Date: 16 September 2002
• Docket Number: No. 48478-8-I.,48478-8-I.
• Parties: Jerry L. HISLE, Michael D. Nicholas, Dale A. Riccetti, Jerry Roth, Ron L. Shoup, individually, and on behalf of the class they represent, Appellants, v. TODD PACIFIC SHIPYARDS CORPORATION, a Delaware corporation, Respondent.
• Court: Washington Court of Appeals

54 P.3d 687

113 Wash.App. 401

Jerry L. HISLE, Michael D. Nicholas, Dale A. Riccetti, Jerry Roth, Ron L. Shoup, individually, and on behalf of the class they represent, Appellants, v. TODD PACIFIC SHIPYARDS CORPORATION, a Delaware corporation, Respondent.

No. 48478-8-I.

Court of Appeals of Washington, Division 1.

September 16, 2002.

Bruce E. Heller, Seattle, WA, for Appellant.

Richard J. Omata, Jennifer A. Burkhardt, Seattle, WA, for Respondent.

KENNEDY, J.

The 1997 collective bargaining agreement between Todd Shipyards and Puget Sound Metal Trades Council provided for a one-time retroactive contract ratification incentive payment to certain unionized employees at Todd, in the amount of $0.60 per attendance hour during the period covered by the retroactive payment. Jerry Hisle, Michael Nicholas, Dale Riccetti, Jerry Roth and Ron Shoup (hereinafter the "named appellants") are union members who were entitled to receive the retroactive payment. They and 877 other like-situated employees worked overtime hours during the period covered by the retroactive payment. Todd made the payment when it fell due, but did not pay time and one-half for the overtime hours. The named appellants brought this action, seeking class action certification and a declaratory judgment that they and the other like-situated employees were entitled to time and one-half for their overtime hours during the period covered by the retroactive payment, under Washington's Minimum Wage Act. The trial court denied the named appellants' request for summary judgment and class certification, and granted summary judgment to Todd, dismissing the lawsuit on grounds of res judicata, contract bar, estoppel, federal preemption and the statute of limitations. We reverse the trial court's rulings. This lawsuit is not barred by any of the doctrines upon which Todd relies. Moreover, because the payment was conditioned on the number of hours worked by the employees during the retroactive period, it became part of the regular rate at which they were employed during that period and Todd owes retroactive overtime pay for the covered period. We remand for entry of summary judgment in favor of the named appellants on the overtime pay issue, reconsideration of the motion for class certification in light of our rejection of Todd's defenses, and for a trial on damages and attorney fees. We also award the named appellants their reasonable attorney fees for this appeal.

FACTS

The named appellants in this lawsuit, for which they seek class action certification, are members of various unionized crafts who work at Todd Shipyards. Historically, the Puget Sound Metal Trades Council (PSMTC, or the union) has represented Todd's unionized employees in collective bargaining with the company. In 1994, Todd bid on a contract with the State of Washington to build state ferries. At the time of the bid, a collective bargaining agreement (CBA) was in effect spanning 1993-1996. So that Todd could submit a competitive bid for the state ferry contract, Todd and PSMTC negotiated a separate labor contract, known as the Ferry Project Agreement (FPA), with lower wages and more flexible working conditions, solely for employees who would be working on the ferries. The FPA was executed on December 29, 1994, and was to continue until March 31, 2000. Thus, the CBA and the FPA overlapped. The FPA contained a provision that "[i]f the Parties cannot reach agreement for successor labor agreements, their differences shall be resolved by interest arbitration, using the procedures set forth for a single arbitrator in the current labor agreement, and in successor agreements." Clerk's Papers at 26. Except as otherwise specified in the FPA, the terms and conditions of the 1993 CBA continued to apply to all of Todd's unionized employees.

Negotiations for a successor CBA commenced in February 1996. Todd and PSMTC reached a tentative agreement in June 1996, but when it was submitted to the union membership for a ratification vote it was rejected. After months of additional negotiation, Todd and PSMTC reached a new tentative agreement in March 1997. But the membership rejected this proposal, as well. Todd and PSMTC reached their next proposed agreement in May 1997. This proposal provided for a wage and fringe benefit increase, effective upon ratification, of $0.60 per hour, and also provided that an additional, one-time retroactive payment of $0.60

for each non-Washington State Ferry Project attendance hour from August 1, 1996 until the execution date of the contract (less applicable employee deductions) shall be made to all non-Washington State Ferry Project employees that were actively employed on the execution date of the contract or had seniority rights as of the execution date of the contract.

Clerk's Papers at 64. The parties agreed that "attendance hours" meant "actual hours worked in the shipyard." Id. at 264.

It is undisputed that the one-time retroactive payment was intended to serve as a contract ratification inducement. Nevertheless, when this proposal was submitted to the union membership for ratification, they turned it down. Todd and PSMTC agreed that they had reached an impasse, and that they were required by the arbitration clause in the FPA to submit their differences to be resolved by interest arbitration.

After some initial skirmishes, during which PSMTC indicated its intention to submit new proposals to the arbitrator, and Todd indicated its intention to submit the last proposal but without the ratification inducement, the company and the union agreed to jointly submit the May 1997 proposal that the membership had rejected. On November 17, 1997, the arbitrator issued the following award:

B. The authorized representatives of the parties have reached a reasonable bargain and no issues have been left unresolved; and

C. The Interest Arbitrator must adopt the proposed successor [CBA] agreed to by the parties.

Clerk's Papers at 104.

Todd paid the ratification inducement on December 10, 1997. Todd did not pay time and one-half to those employees who had worked overtime hours during the retroactive period, but instead paid for overtime hours at the same $0.60 rate as regular hours. This did not pass unnoticed by the membership, some of whom sought an opinion from a labor law attorney as to whether they were entitled to overtime pay as part of the retroactive payment. The attorney they consulted opined that they were not so entitled.

On February 17, 1998, some 200 unionized Todd employees, including the five named appellants in the instant matter, filed suit in federal court under the caption Adams et al. v. Puget Sound Metal Trades Council, AFL-CIO, and Todd Pacific Shipyards Corporation (Adams) seeking a declaratory judgment that PSMTC had breached its duty of fair representation and exceeded its authority by executing the 1997 CBA after it was rejected by the membership, that Todd knew or should have known that PSMTC exceeded its authority in executing the agreement, that the 1997 CBA was null and void because it had been rejected by the union membership, and that the arbitrator exceeded his powers by issuing the award. Todd filed a counterclaim, contending that if the court vacated the arbitrator's award and nullified the CBA, the plaintiffs should be required to disgorge the increase in wages and fringe benefits they had been paid under the CBA, including the ratification inducement.

The plaintiffs and the union subsequently settled the Adams lawsuit. By the terms of the settlement agreement, PSMTC promised never again to execute a collective bargaining agreement with Todd Shipyards that had not been ratified by bargaining unit members, the plaintiffs agreed to the dismissal of all of their claims in the action, and the plaintiffs and union mutually agreed to "release each other from any and all claims, demands, liabilities, and causes of action of every kind stemming from or in any way related to the claims raised in this Action." Clerk's Papers at 141. Todd had been joined in the lawsuit as a necessary party because it was a party to the CBA. Todd was not a party to the settlement agreement, but agreed to the dismissal of all claims and counterclaims by approving entry of an order of dismissal dated June 2, 1999.

The five named appellants subsequently brought the lawsuit that is the subject of this appeal, claiming that, under Ch. 49.46 RCW, Washington's Minimum Wage Act (MWA), they and 877 unionized workers at Todd Shipyards had been underpaid for overtime hours included in the one-time retroactive payment provision of the 1997 CBA.

Both the named appellants and Todd moved for summary judgment, and the named appellants moved for class certification. The trial court granted summary judgment to Todd, denied the motion for class certification, and dismissed the lawsuit. This appeal followed.

DISCUSSION

I

Todd suggests, and we agree, that it is logical for us to first address its defenses to the lawsuit, since it is only if the trial court erred in ruling that the named appellants' claims are barred by the doctrine of res judicata, contract bar, estoppel, the statute of limitations, and preemption that we need reach the named appellants' claims that the trial court should have granted them summary judgment, certified the class, and proceeded to trial on the issues of damages and attorney fees.

1. Res Judicata

The purpose of the doctrine of res judicata is to avoid relitigation of claims or causes of action arising out of the same transactional nucleus of facts, Deja Vu-Everett-Federal Way, Inc. v. City of Federal Way, 96 Wash.App. 255, 262, 979 P.2d 464 (1999); Costantini v. Trans World Airlines, 681 F.2d 1199, 1201 (9th Cir.1982), so as to avoid repetitive litigation, conserve judicial resources, and prevent the moral force of court judgments from being undermined. International Union of Operating Eng'rs v. Karr, 994 F.2d 1426, 1430 (9th Cir.1993).

Res judicata bars...